Social E-Commerce: A Major Driving Force in China’s Alcohol Consumption

Social E-Commerce

Why is Social Shopping Popular in China?

Social e-commerce, or social shopping, is when social media are integrated into traditional online shopping. This is hugely popular in China, more so with the rise of the new generation of shoppers and their changing lifestyle. Over the years, social networks have evolved into a multi-dimensional experience platform. Many Chinese prefer the convenience of buying products online while scrolling through different social media platforms.

Social e-commerce’s reach in China is no joke, as even those living in the rural areas do their share of social shopping. By 2020, the country’s social e-commerce market is expected to reach US$150 billion, with over 24 million merchants selling goods online. Most of the consumers tend to make their purchases based on product reviews posted on social media, most of which are recommendations from friends and family.

How Does Social Shopping Work?

Most Chinese shoppers do social shopping via e-marketplaces like Tmall, Taobao or JD.com. They hype up flash sales and promos by encouraging consumers to share pictures of their purchases on social media in exchange of incentives for their effort. As of July this year, about RMB 5.25 billion (US$757 million) worth of wine have been sold through these sites.

Trending social shopping apps like Pinduoduo also draw in thousands of audiences every day. It already has more than 300 million users and recently ranked as the second-most popular e-commerce app in China behind Taobao. Such platforms have paved the way for the growth of online alcohol market in the country, now the largest in the world at US$6.1 billion (¥41.9 billion).

Meanwhile, WeChat remains a dominant force in China with its 850 million registered users. Many sellers engage shoppers by sharing products in the social media app. This year, some of the top-ranked items sold on the app’s social stores are beer, health supplement and clothes. There is also the Little Red Book or Xiaohongshu, an Instagram/Amazon-like social commerce platform based in Shanghai with more than 100 million users.

How Can Brands Benefit from Social E-Commerce?

With hundreds of thousands of active users in China, social media platforms are perfect in creating higher visibility for products being sold. Companies use them to increase product awareness and to reach a larger audience. By sharing and reposting links of content, users can generate traffic to shopping websites, resulting in higher search engine rankings.

Social media sites also help in building a bigger and fuller picture of who consumers are, what they like and dislike, as compared to traditional e-marketplaces. They provide companies with in-depth information on what motivates purchases, allowing them to prepare better online catalogs and make relevant product recommendations to meet the demand.

Companies are also able to take a more personal approach in engaging with consumers through social networks. By building and maintaining good relationships with clients, they gain loyal followers. Satisfied and happy consumers are more likely to make repeat purchases. If done right, the benefits that businesses can get from investing on social e-commerce will be worth the time, money and effort they will pour into it.

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